Consumer loans appear to have virtually no sensitivity to the business cycle,staying relatively stable through both recessions and expansions.

Question

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Consumer loans, like any other type of loan, may be affected by changes in the business cycle. During a recession, consumers may be more hesitant to take out loans, and lenders may tighten their lending standards, causing a decrease in consumer loan activity. Conversely, during an expansion, consumers may be more confident and have greater access to credit, leading to an increase in consumer loans. Therefore, consumer loans do have some sensitivity to the business cycle.

Consumer Loans Appear to Have Virtually No Sensitivity to the Business